So many people have complained that something must be done about U.S. health care. But the truth is that a solution has been staring us in the face for years — about forty years, in fact. And it all started with Ronald Reagan.
In 1971, California was heading toward bankruptcy because of out-of-control welfare spending, so Governor Reagan tapped Robert B. Carleson to design and implement the first-ever welfare reform — and it worked. Fraud and waste were reduced so much that the state not only remained solvent, but was able to afford the first welfare benefit increase in over twelve years to the state’s most needy.
Like our founding fathers, Reagan and Carleson believed that government closest to the people governs best. The ultimate success of their philosophy was the historic Welfare Reform Act of 1996, which freed millions of Americans from the narcotic of dependency.
The key was repealing the entrenched system of sending federal matching money to the states and replacing it with a system of finite block grants appropriately titled the Temporary Assistance to Families with Dependent Children (TANF). That reversed the destructive incentive for states to steadily increase their welfare rolls and spending and instead encouraged them to focus on those truly in need. The rest is history.
The ’96 reform was an unqualified success by every measure. Welfare caseloads dropped by more than two-thirds, from a record 5 million families in 1994 to 1.6 million families in 2009. Most of the former recipients went to work, and earnings rose as child poverty fell. It was a true American success story.
It’s now time to apply this proven solution to other welfare programs, beginning with Medicaid.
The surprising Supreme Court decision to uphold the Affordable Care Act (ACA) as a tax means that Congress must repeal it and replace it with policies that cure, rather than exacerbate, deficiencies in our medical care system for the poor. The law of supply and demand, like gravity, is a stubborn thing. Expanding Medicaid, as envisioned in the ACA, would spread already scarce resources more thinly and end up hurting the neediest among us.